Online refers to being connected by computer to one or more other computers or networks, as through a commercial electronic information service or the Internet, or activities conducted while online.
In line refers to standing in a queue with other people who are waiting their turn.
You are online when you are connected to the internet.
You are in line when you are waiting your turn at the grocery store checkout. You are not on line (unless, of course, you are checking your e-mail via BlackBerry, or some similar activity).
You might be waiting online if your page is loading slowly.
You might even be waiting in line online if you’re playing a game and have to wait your turn to log on.
But back at grocery store? You’re NOT waiting “on line.” You are in line. You are waiting in line.
End of rant!